A recent report from the federal government shows that loan servicers are offering few loan modifications to borrowers through the federal government’s Making Home Affordable Program. This program, created in the wake of the financial crisis, was intended to keep struggling owners in their homes. Instead of providing a necessary defense to foreclosure, the program has become a mess, with many borrowers being rejected for loan modifications through the Home Affordable Modification Program (“HAMP”). One article suggests that an astonishing 70% of all loan modification applications are denied by servicers.
I can count on my right hand the number of struggling borrowers who have been promptly considered for a loan modification by their servicer. The majority go through months of back and forth communications with their lenders, who typically “lose” the required documentation or come up with absurd reasons for denial.
What’s a homeowner in need of a loan modification to do? Create a paper trail of one’s efforts to apply for a loan modification and contact a lawyer if you are not getting the results you need.